Advance origin ruling urged to minimise risks of trade war

Director of the HCM City Customs Department Dinh Ngoc Thang speaks at the conference on December 12 (Photo: VNA)

HCM City (VNA) – Vietnamese
businesses have been advised to apply the advance origin ruling mechanism to
reduce risks amidst significant changes in global trade, such as the US-China
trade war.

At a conference in Ho Chi Minh City on December
12, Director of the municipal Customs Department Dinh Ngoc Thang said this
mechanism will help companies specify the codes, origin, and customs value of
their products in advance.

The advance ruling on goods classification will
help minimise disagreements between persons filling customs declaration forms
and customs officers over the function of goods. Meanwhile, the advance ruling
on value will assist firms in estimating the taxes they have to pay in advance when
handling customs clearance procedures.

Notably, the advance ruling on origin will help
eliminate the risks of product origin frauds, which is especially helpful in
the context of the US-China trade war likely to be prolonged, he said.

Thang elaborated that the trade tension could
generate more opportunities for Vietnamese firms to access the US market in the
short term. However, Vietnam is also facing the risk of becoming a destination
for Chinese goods to falsify their origin to avoid high US tariffs, which would
be damaging to Vietnam in the long run.

He added that most Vietnamese businesses have
yet to capitalise on the advance rulings to reduce risks and boost
import-export activities. Since this mechanism was applied four years ago, the
HCM City Customs Department has only recorded just over 170 cases using this
mechanism.

Tran Ngoc Liem, Deputy Director of the HCM City
branch of the Vietnam Chamber of Commerce and Industry (VCCI), said that the
trade war has a considerable influence on Vietnam’s economy.

According to Liem, the US is a leading importer of Vietnamese goods. The
structures of Vietnamese and Chinese products shipped to the US are also
relatively similar. This means that there is an opening for Vietnam to replace
China’s supply sources in the US, but Chinese companies may also take advantage
of the goods structure similarity to falsify their origin of goods, he noted.

Liem urged domestic enterprises to actively
apply the advance origin ruling to protect themselves, along with the
Vietnamese economy.

Echoing the view, Robert Thommen, a
representative of the US Customs and Border Protection, said that the
application of anti-trade fraud measures, like anti-subsidy and anti-dumping, are
becoming more and more popular in the US. In the context of the trade tension
with China, the US has tightened control over the risks of Chinese goods being
transferred to a third country.

Therefore, Vietnamese firms should be proactive
in preventing risks through advance rulings. Notably, they needs to thoroughly
understand and adhere to rules of origin to maintain good trade ties with the
US in the long term, he added. –VNA